This is a phase II SBIR grant to develop a new therapy for the treatment of type II diabetes. Adenosine Therapeutics, LLC (ATL) is a biotechnology company started in Charlottesville, Virginia in 1999. ATL owns patents on the formulation of selective antagonists of A2B adenosine receptors (A2BAR). Dr. Kathryn LaNoue of Penn State University discovered that A2BAR blockers lower blood glucose in insulin resistant animals. A use patent to this discovery has been licensed to ATL. In the phase I portion of this grant we found that novel highly selective A2BAR blockers lower blood glucose in mice or rats, but the efficacy of the early compounds was limited, probably due to very low aqueous solubility and low bio availability. A new family of antagonist that has much higher solubility has recently been formulated at ATL and found to be very effective in lowering blood glucose. In a continuing collaboration between ATL and the LaNoue laboratory, we now propose to identify a therapeutic candidate for the treatment of diabetes. More compounds will be screened for potency and selectivity in radio ligand binding assays. Promising compounds will be screened to determine their potency and efficacy in bioassays to lower blood glucose in insulin resistant animals. The most active compounds will be evaluated for oral activity and for pharmacokinetic and pharmacodynamic properties. A few compounds will be evaluated in euglycemic clamp studies with Zucker rats. Our goal is to identify a lead compound that has good characteristics as a potential new drug. If we identify such a compound our plan is to partner with a large pharmaceutical company for clinical trials.